You'll have to call your provider for details. I think the buy out on my AT&T contract is a prorated buyout so the price should be closer to half of what you figured. At least that was how it was explained to me when I first signed up for a AT&T contract two years ago - which I just renewed last week to get my first, iPhone 3GS for 25% the price of a iPhone 4. I can upgrade in 12 or 18 months (depending on who I talk to) so I will be ready if I want a iPhone 5 next year (should be out in about 6 months or so) - which means another 2 year contract 🙁
If you want a iPhone 4 now you might be fine today. Again, this is how it was explained to me but I am in the US. They said with a 2 year contract I will be eligible for a phone upgrade in 18 months or 12 months - the 12 months time frame came with a wink and a smile 😉